Of the much-criticized moves made by the United States government to stave off the worst of the financial crisis, the most criticized was the bail-out of major banks. The Troubled Asset Relief Program, or TARP, was widely pilloried as Congress helping out Wall Street, not Main Street. However, as it turns out, TARP isn’t going to be the $700 billion loss everyone thought. In fact, the US government made $12 billion dollars profit after selling its stake in Citigroup.
“By selling all the remaining Citigroup shares today, we had an opportunity to lock in substantial profits for the taxpayer,” said Tim Massad, acting assistant secretary for financial stability. “We have advanced our goals of recovering TARP funds, protecting the taxpayer and getting the government out of the business of owning stakes in private companies.”
At one point, the United States owned 27 percent of Citigroup, thanks to $45 billion dollars in bail-out money. Citigroup repaid $20 billion in December 2009, and now the government’s stock sale has further added to the profits. The bail-out of Citigroup might become even more profitable, as the US still has to sell off various warrants and preferred securities it still retains. As for the other recipients of TARP, General Motors has started repaying its debts after a wildly successful IPO and the government is expected to sell off its shares of AIG in the coming months.
Tags: TARP, Troubled Asset Relief Program, Citigroup, US government sells of shares of Citigroup, government makes billion off of Citigroup, Citigroup stock sale nets government billion profit, TARP profits